“Things must move in a hurry, and time is of the essence,” Wooten said after visiting with members of the U.S. House and Senate in Washington last week. “I feel very positive that we can see a buyout this year.
“I think our future rests with the buyout,” Wooten says. “Without this buyout moving forward this year, I think the future of tobacco is going to be extremely bleak in terms of the tough medicine we would have to take to remain in the tobacco business in this country.”
Industry experts and farm leaders alike see 2003 as the year for a tobacco buyout to happen because of the impending election year in 2004. They also point to declining quotas and markets as reasons the current program isn’t working.
If passed, tobacco buyout legislation will likely contain two main elements: Compensation for quota owners and growers and Food and Drug Administration regulation of cigarettes at the manufacturing level. Some in the industry see FDA regulation making a tobacco buyout bill possible.
Before the July recess of Congress, the Senate was farther along than the House in developing a framework to move tobacco buyout legislation.
Wooten and others made the trip to Washington to “try and push the movement of a bill in the House, even though it might not be a perfect bill.”
All along the framework has been what’s commonly described as “$8 and $4,” Wooten said in a telephone interview from Farm Bureau’s Raleigh office.
“By far the main component of the buyout legislation is $8 and $4,” Wooten says. “We started this discussion two or three years ago to compensate the owners and growers for their investment in this program – so we could get the cost of the program out of the price of American tobacco.”
Wooten sees a buyout “as the greatest economic development package for agricultural and rural North Carolina. It would provide the stimulus for a lot of activity. Right now many tobacco growers and quota owners are just standing pat or hanging on waiting for a decision to happen on this buyout.”
Other components, such as maintaining tobacco grown in traditional areas and a safety net similar to other agricultural commodities would be nice, Wooten says.
“The Senate is much farther along in developing a framework and language to make a buyout happen than the House,” Wooten says. “Non-tobacco state senators seem to have a better understanding of why a tobacco buyout is important. Our main job right now is to try and push the House to get a bill moving, even though it may not be a perfect bill.”
Currently, a bill introduced by U.S. Rep. Ernie Fletcher, R-Ky., “has the most legs in the House, but changes will have to be made to this bill for it to come out of the House. Our job is to get serious movement in the House.”
Visiting with members of Congress before the Fourth of July break, Wooten says he’s still optimistic that a buyout will be passed this year. It must happen this year, however.
After a buyout, fewer growers will grow more acres of tobacco. The price of tobacco will fall, hopefully making U.S.-grown leaf more competitive on the world market, Wooten says. The competitiveness of U.S. tobacco, the financial health of cigarette manufacturers and lawsuits against manufacturers will be among the factors that determine how much tobacco will be grown.